Category Archives: BOOKS

Putinism is apparently a thing. Why? And what thing is it? Putin is enormously popular among Russians because (1) they think he is responsible for the increase in their living standards when in fact they have benefited from the spike in oil prices; (2) he controls the media, which presents him as a savior; (3) he has reintroduced public order after the chaos of the transition; (4) he has appealed to national pride by making Russia a superpower again (or so they think: really a Potemkin-power); and (5) Russians don’t like democracy or liberalism but prefer the iron fist of an authoritarian ruler.

Back in the 1990s, there was a lot of interest among law professors about the interaction between law and social norms. There were several conferences. I wrote a book about it. Even the New Yorker published an article about it. There had been a general sense that traditional economic models then being used in law and economics took too much for granted–suggested that the government could in an uncomplicated way lay down the rules for people to follow and then sanction them if they violate those rules. In fact, people often act in orderly ways and generate public goods for themselves without resorting to law. They may not even know about the law. Robert Ellickson wrote a famous book about this phenomenon. If all this is so, the question is how.

Game-theoretic models–then newish among lawyers (although decades old), now familiar–seemed to offer explanations. And they had interesting implications. Scholars quickly realized, and showed with these models, that poorly designed law, if it did not respect or work off of social norms, could damage them, possibly, or in other ways generate perverse consequences. Maybe people would be less likely to trust the government and follow its laws if the government tries to change the social norms they care about. On the other hand, the models provided no guarantee that social norms would be efficient, contrary to Ellickson.

The literature seemed to have run out of steam a number of years ago. The game-theoretic models turned out to be not very tractable. They seemed to be able to explain too much. (Game theory is good at showing that cooperative behavior is consistent with rationality, less good at showing that it is entailed by it.) Or maybe we don’t need (as well as can’t have) a general theory of social norms. It’s enough to know a lot about whatever particular area of human behavior you’re writing about.

Richard McAdams has published a new book called The Expressive Powers of Law. It is in some ways a throwback to the earlier literature. It puts a great deal of emphasis on the way that “focal points” can structure people’s behavior when people are otherwise trying to coordinate with each other. The government can manipulate focal points, and in that way influence people’s behavior for the better. But in the complex informational environment in which people operate, there are limits to how much the government can do. The strength of the book lies in the careful way that it explores those limits, and throws cold water on some excessively ambitious claims about how the government can “send a message” in order to influence behavior. This excellent book is well worth a read.

I wrote this review for a magazine which accepted it and then for unexplained reasons never published it. On the principle that “blog” is just another word for vanity press, I self-publish it here. Hull’s book is very good; you can buy it here.

Glen Weyl and I wrote a piece for The New Republic on Piketty’s book. Piketty’s book has received a lot of attention for two reasons–the first is that it is rigorous and fascinating; the second is that its focus on inequality resonates with public anxieties about the direction of the market economy.

There is a sensible argument about inequality and there is a dubious one. The sensible argument is that today certain lucky folks–financiers, start-up entrepreneurs who hit the jackpot, top CEOs, and so on–who earn vast incomes, almost certainly far in excess of what is needed to motivate people to generate value for the economy, and in many cases (above all, in finance) even in excess of whatever value they do generate, should pay higher income taxes. Many people think that Piketty’s book makes this argument. But while Piketty endorses this view, or at least seems to, this view is not the distinctive contribution of his book.

The book is called “Capital in the Twenty-First Century,” not “Income in the Twenty-First Century.” Piketty argues that extreme inequality is the result of the accumulation of capital in the hands of the few across generations. And because the rate of return on capital is higher than the “natural” rate of economic growth, inequality can only increase. This argument really is distinctive–it is the distinctive contribution of the book–and it is what leads him to endorse a wealth tax (as opposed to a higher income tax, though he does support a higher income tax as well). This argument is dubious. It rests on implausible assumptions about how super-rich people spend their money, and, most of all, how they transfer it to heirs.

This book explores compliance with the laws of war, focusing on laws regulating the treatment of POWs, using theoretical models and empirical data. Governments take an instrumental approach to the law: they follow it when it serves their interest. The major way this can happen is if retaliation by the enemy is worse than any temporary gains from violating the law while the enemy follows it. Thus, a state may violate the law if (1) the law puts it at disadvantage and so it gains from disregarding it even if the enemy does as well; or (2) the law puts the enemy at a disadvantage so it cannot be expected to comply with it. Mutually beneficial cooperation can break down because the rules are unclear, but trying to get them precise in advance is difficult because of uncertainties about future changes in technology and the like.

A good companion book is Isabel Hull’s A Scrap of Paper, which examines the laws of war during World War I. Hull also addresses the laws of neutrality, which create more complex strategic interactions than POW rules do. A belligerent wants to inflict as much harm on the enemy as possible, including interference with trade with neutrals, but up to the point where the neutrals themselves protest and may join forces with the enemy. The legal rules play an even more limited role than POW rules do. Neutrals have complex attitudes toward the belligerents, and some will tolerate violations of the law of neutrality by one belligerent because of their hostility to the other.

Hull is a historian while Morrow is a political scientist but the books tell a similar tale about governments’ instrumental attitudes toward international law. International law professors, who regard international law from a static, doctrinal perspective, and against all evidence take compliance for granted rather than as a problem that influences how the law is interpreted, could learn a lot from these books.

There is much of interest in this excellent new book by Cass Sunstein. The preface contains a defense of the different roles of the academic–to challenge conventional wisdom–and the public official, who must often keep his opinions to himself for the sake of operating in a team. People like Sunstein who move between academic and public roles face numerous challenges–both from the public, who see in the academic writings evidence of ideological extremity and from (naive) colleagues, who expect the advocate of (impractical) X to champion it public life even if it would bring down the ship of state. These divergent reactions are difficult to handle; few people handle it as gracefully as Sunstein has. A whole book could be written about those less graceful individuals, many of them also law professors, who traveled between law schools and various recent presidential administrations.

A few comments on Chapter 1, on conspiracy theories, which has received outsized attention:

1. Are conspiracy theories important or are they just little clumps of seaweed in the vast and bottomless ocean of public ignorance?

2. I can’t help thinking that there would be even more conspiracy theories ruining public life if people heeded calls from academics and politicians to become more involved in political debate.

3. Can “cognitive infiltration” (an unfortunate choice of words, I think, with its unnecessary sinister overtones) really work? The idea is that anonymous government agents could penetrate chat rooms and answer craziness with reason. But conspiracy theories seem to answer a deeper need than the desire for truth. N.B.: I suspect that government officials, on their own time, and not as part of formal programs, already do this, leading one to wonder how often Man-Who-Was-Thursday scenarios erupt in these chat rooms.

Have you read your iTunes contract–the one that Apple asked you to read and accept before using the service? No? Neither have I. It’s 55 pages long. How about the mortgage disclosures that accompanied your last refinancing? In Illinois, you would need to read 49 disclosure forms spread out over 101 pages. When I refinanced my mortgage, the huge stack of disclosures induced a faint bout of nausea but no wisdom. A professor who teaches contract law and banking law, I quickly gave up trying to understand what I was reading.

The law overflows with disclosure mandates even though it is pretty obvious to everyone that they hardly do any good. Instead, they confuse and frustrate buyers. In this terrific book, Omri Ben-Shahar and Carl Schneider exhaustively describe this phenomenon. Mandatory disclosure is law’s biggest and phoniest panacea, as they amply demonstrate.

The appeal of mandatory disclosure laws is easy to understand. They seem like a good way to protect buyers without interfering with the seller’s power to choose terms that protect its interests–an early form of “nudge.” And while in certain circumstances they can do good, they more often cause the seller to game the system by reducing quality along dimensions that the disclosure mandate does not cover, leading the government to force the seller to disclose more and more. The upshot is that consumers are overwhelmed with information they can’t understand.

In a kind of infinite cycle to hell, courts strike down contracts because buyers can’t pick out a key term among the Borges’ library of information, and sellers protect themselves by pointing out the most important terms and demanding that buyers initial them. I can’t remember how many terms I was required to initial in my mortgage but it was surely dozens. (I didn’t read any of them as an act of defiance and self-preservation.) Eventually, people will be required to initial every sentence of 100-page contracts and be required to take exams that test their understanding before being allowed to go home with their toaster or space heater. We will understand every last detail of everything we buy but have no time to use it.

William Easterly argues that efforts to help poor countries achieve economic growth have gone astray because western experts impose top-down recipes for growth (a kind of Stalinist approach that mixes hubris and incompetence):

The conventional approach to economic development … is based on a technocratic illusion: that the belief that poverty is a purely technical problem amenable to such technical solutions as fertilizers, antibiotics, or nutritional supplements.

The problem, as Easterly shows in this book and in his previous books (including the terrific White Man’s Burden), is that these technical solutions fail because western experts rarely understand the intricacies of the local environment, and, more important, the politics and institutions in the countries they seek to help. Often, technically flawless development projects fail because of corruption and abuse in the country that is being helped. The gleaming power plant operates for a few years and then falls into disrepair because the absence of an effective legal system that enforces property and contract rights makes it impossible to collect bills or protect against squatters.

The solution? It turns out to be human rights:

What you can do [about global poverty] is advocate that the poor should have the same rights as the rich…. This assertion of the rights of the poor is needed now more than ever…. This books argues [that] an incremental positive change in freedom will yield a positive change in well-being for the world’s poor.

Easterly does not explain what any of this means. Which rights should we advocate? How should we insist that they be implemented? What should we do to governments that refuse to take our advice? I suspect that if he gave these questions some thought, he would realize that any serious effort to compel or bribe poor countries to recognize rights would look like the development activities that he criticizes. Indeed, his bête noir, the World Bank, famously tried to implement “rule of law” projects that were supposed to enhance rights. These projects failed for all the reasons that all the other development projects failed.

Easterly provides no evidence that if we advanced human rights in poor countries, well-being in those countries, or even respect for rights, would improve. In fact, there isn’t any.

Fragile by Design, by Charles Calomiris and Stephen Haber, is a great book. The authors argue that the stability and efficiency of financial systems in different countries depend on political bargains that set the rules of the game. Authoritarian countries produce inefficient state-owned banking systems because governments cannot commit not to expropriate. But democracies produce a wide range of outcomes, depending on the configuration of constituencies and interest groups. The United States is cursed with a highly unstable banking system because local interests have been able to ensure a huge number of local unit banks that were insufficiently diversified. This system finally broke down thanks to the inflation of the 1970s, but our further misfortune was a political bargain between activist groups and large banks in the 1990s that resulted in a system where banks were encouraged to reduce underwriting standards so as to extend credit to low-income people. Meanwhile, countries like Canada were lucky enough that the initial political bargain at a national level led to a small number of stable and efficient banks that weathered the financial crisis of 2008.

There are a huge number of moving parts and epicycles (why was our unstable system so stable from 1936-1980?, and what explains the success of activists like ACORN?), but the book is nonetheless enormously illuminating, and contains the most powerful and concise account of the causes of the 2008 crisis that I have seen.

Via a helpful review by Daniel Farber, I found out about this book, which is a much-needed one. I have searched in vain for some time for an overall assessment of deregulation in the United States. Unfortunately, if the remit of McGarity’s beloved Consumer Protection Safety Commission extended to books, this one would have to be recalled.

McGarity argues that the deregulation movement arose from a conspiracy between business interests and right-wing intellectuals, who hoodwinked Congress and the public. In fact, deregulation was largely a bipartisan movement that started in the Carter administration, and reflected an emerging consensus that many (but not all) regulations did more harm than good–in particular, rate regulation. McGarity barely discusses or discusses not at all airline, trucking, and railroad deregulation of the 1970s, which generally has received high marks, or the resistance of business interests to some forms of deregulation–all of this contrary to this thesis. He is certainly right that a lot of deregulation went too far–notably financial deregulation–but because he refuses to provide a realistic baseline for determining whether deregulation benefits or harms the public, he provides no reasonable method for distinguishing between good deregulation and bad deregulation or, for that matter, good regulation and bad regulation.

Instead, he resorts to anecdotes. One of the weakest chapters discusses transportation safety, and he includes some distressing anecdotes of terrible accidents that he blames on deregulation. But transportation safety has greatly improved over the period of deregulation. Numerous studies show that railroads, airlines, passenger vehicles, and other modes of transportation are vastly safer today than they were in the 1970s. McGarity acknowledges some of these statistics at the beginning of the chapter, but by the end he has forgotten them, and instead pronounces deregulation a disaster for safety. Nor does he acknowledge the economic benefits from transportation deregulation, which have been extensively documented by economists.

Similar points can be made about other chapters, for example, the chapter on workplace safety, which provides a tendentious picture of mine safety being utterly neglected, when in fact safety has steadily improved (as shown by the graph above). The fatality rate dropped from 0.200 (1970) to 0.059 (in 1980) to 0.016 (in 2010) fatalities per 100,000 workers in coal mines. Certainly, stricter regulation would have caused the fatality rate to drop even further, but would it have been worth the cost? No answer is provided.

Another lurking question is the extent to which deregulation actually took place. As Farber notes, the evidence is often equivocal. The sheer number of rules has greatly increased; budgets are a more complex story, but private rights of action have also become more important. When rate regulation in the railroad and telecommunications sectors were eliminated, it was also thought necessary to introduce regulations to ensure free entry, leading to quite complex regulatory regimes. Airline safety was never deregulated; the fear was that price competition would lead to less safe airlines. What exactly deregulation is, and whether it has had good or bad effects, are important questions. We’ll need to wait for another book for the answers.

This book provides a nice history of the evolution of voting rules, with emphasis on supermajority rules, but is less successful in its attempt to argue that supermajority rule should presumptively be replaced with majority rule. Schwartzberg simultaneously argues that majority rule is superior to supermajority rule because the latter creates a bias in favor of the status quo, and acknowledges that a status quo bias is justified so that people can plan their lives. Her solution–what she calls “complex majoritarianism”–is the manipulation of majority rules so that they are applied to favor–the status quo. For example, she favors constitutional amendment requiring a temporally separated majority vote in the legislature (plus subsequent ratification), but the effect is just bias in favor of the status quo except in the unlikely event that preferences don’t change. She argues that this approach advances deliberation but deliberation can be encouraged in other ways and in any event the status quo bias is not resolved.

The book is right to emphasize historical, empirical, and institutional factors as opposed to the sometimes tiresome analytics of social choice theory–as emphasized by this enthusiastic review here–but Schwartzberg’s argument against supermajority is ultimately analytic itself, based on abstract considerations of human dignity, rather than grounded in history or empiricism. The empirical fact that the book doesn’t come to terms with is that supermajority rule is well-nigh universal, not only in constitutions but virtually every organization–clubs, corporations, civic associations, nonprofits–where people voluntarily come together and use supermajority rules to enhance stability and to prevent situational majorities from expropriating from minorities.

David Bosco‘s new book tells the history of the International Criminal Court. It is nicely done and will be a reference for everyone who does work in this area. The conclusion will not surprise any observers: the ICC survived efforts at marginalization by great powers but only by confining its investigations to weak countries. Thus, the ICC operates de facto according to the initial U.S. proposal, rejected by other countries, to make ICC jurisdiction conditional on Security Council (and hence U.S.) approval.

Bosco seems to think this equilibrium can persist, but the book only touches on (perhaps because it is too recently written) the growing resentment of weak countries, above all African countries, which have woken up to the fact that the Court is used only against them, and have begun to murmur about withdrawing. The Court now faces political pressure to avoid trying not only westerners, but also Africans. Meanwhile, the Kenya trials are heading toward debacle, while the ICC is unable to address international criminals like Assad. The Court’s room to maneuver is shrinking rapidly, and one wonders whether it can sustain its snail’s pace (one conviction over a decade) much longer. The book might have been called “Just Roughness.”

Adrian Vermeule’s new book, The Constitution of Risk, argues that much constitutional thinking follows a model of “precautionary constitutionalism,” where doctrines are designed to avoid worst-case outcomes. A better approach is what he calls “optimizing constitutionalism,” where such “political risks” are traded off rather than minimized. The Court of Appeals in Noel Canning, for example, appeared to be driven by a fear that if it upheld President Obama’s recess appointments, then presidents could tyrannize by avoiding the Senate altogether. It ignored the countervailing risk that if the recess appointment is limited, important offices would go unfilled. As Cass Sunstein has written in the area of regulation, the precautionary principle makes little sense on its own terms since there are always risks on all sides, and leads to pretty unattractive outcomes even when it can be applied. It’s as if we should all stay in our basements rather than take the risk that flower pot will fall on our heads if we go outside.

Among the many excellent insights, the one I found most striking was the claim that much traditional constitutional thinking and doctrine has a precautionary-principle cast to it, and is thus vulnerable to the same criticisms as that principle is.

Kirkland and Ellis Distinguished Service Professor, University of Chicago Law School